The UPS Strike of 1996 Win-Lose Negotiation Winter 2023

Notes:
1) Provide your answers in clear and concise manner directly below each
question. Ensure that the answer is in bold.
2) Provided, below, are several elements of the UPS Strike of 1996. You
may research, as needed, to provide context and depth to your answers.
3) Any outside research must be cited.
4) Although we cover Distributive Bargaining in Week 4, you can complete
most of the assignment prior to the Week 4 lesson.
5) Submit in dropbox under Assignment #1 by Week 4 Saturday 1159pm.
(Feb. 4, 2023)
6) Value is 15% of semester grade.
Background
The United Parcel Service (UPS) is a US messengerial company founded in 1907, which evolved
into becoming one of today’s largest global provider of package delivery and logistic services as
well as specialized transport.
A major business strategy of this company was to hire mostly part-time workers, which was
quite attractive to young workers. The latter was provided work at off-time shifts earning union-
negotiated wages and benefits. However, part-time work at UPS presented very little chances of
job advancement regardless of the length of time rendered as a short-term contract worker.
By 1996, UPS’s workforce comprised 182,000 part-time workers, working an average of 26-28
hours per week spanning durations of five years that could be more or less at part-time
compensation rates. The Teamster Union, handling the bargaining negotiations for UPS worker-
members, made a careful study of this particular issue and decided to launch a major offensive
strike against UPS. They were, at the same time, banking on public support for their cause.

The Negotiation Plan and Strategy

Union negotiators and UPS union members carefully researched the statutory rights of part-time
workers and what the UPS–Teamster Union contract contained. They analyzed the ratios and
proportions related to part-time workers versus full-time employees, including disparities in
salaries, retirement fund benefits and limited opportunities for full-time hiring. They proceeded
in building-up a campaign platform that manifested the imbalance of economic conditions
between part-time and full-time UPS workers.
In presenting a clearer picture of how UPS exploits the hiring of part-time workers to cut on
costs and employer obligations mandated by the federal government in maintaining regular
employees, the Teamster Union and UPS union members' call for strikes were able to garner
workers' support and of that of the international union organizations.
E-mails about the planned strike were sent out, thus enabling UPS workers to understand the
causes for which the unions would call a work-stoppage. This enabled them to save and
financially prepare for the temporary job loss.
The international labor union was able to set up funds to augment the union-workers’ strike fund
in case it became depleted during the process of long-term negotiations.
The Negotiations
Hence, the union negotiators were able to come up with a definitive list of their demands and
arguments, for which the main agenda was the creation of full-time jobs for part-time workers,
reduction of the salary differential between part-time and full-time workers, job security against
outsourcing and improvement of work safety conditions.
As an example of the union’s preparedness, a UPS concessionary offer of sub-contracting big-rig
driver jobs, instead of hiring on a part time status, was immediately rejected by the union team.
This only meant delimiting job positions available for advancement of full-time drivers.
The union team was able to defeat this counter-bargain by pointing out that the union-UPS
contract contained provisions that sub-contracting could only be allowed if the union would
agree to this.
The Results of the Negotiation
In no time, a successful bargaining agreement was reached, which included the following
settlements among many others:
Ten thousand part-time jobs were converted into full-time occupations at UPS.
Ten thousand job positions available to non-union members and contractors became available to
union members.
Union workers became eligible to perform work modified by technological advancements.
Closing the salary gap between part-time and full-time workers, by increasing part-time salary
rates from $8.00 to $8.50, and providing salary increases that would aggregate a total of $4.10
per hour over the union’s five-year labor contract with UPS.
Replacement of older car fleets with power-steering features and additional ventilations.
Prohibition of mandatory overtime for all workers.
Package car drivers working on holidays are guaranteed to receive remuneration for at least eight
hours.
Expansion of maternity and paternity leaves as approved under the Family and Medical Leave
Act.
Prohibition of disciplinary actions against employees involved in on-the-job accidents and injury
cases.
These are only some of the successful outcomes of the UPS–Teamster Union famous historic
negotiations to end a labor strike that caused UPS million-dollar financial losses as the strike
lasted for two weeks. Prior to the 1996 year-end closing, only 40,000 out of the 182,000 part-
time employees remained under the short-term status.

Questions
1) This was a distributive negotiation. Based on in-class discussion and readings, what are
the reasons that this was a distributive situation? What effect did it have on the
negotiation? (5 marks)
The abovementioned negotiation was an example of distributive negotiation as both
the parties involved, i.e., the union and UPS, were negotiating for a limited pool of
resources such as jobs and benefits, and the outcome would result in one party
gaining at the expense of the other. This type of negotiation is also known as a zero-
sum game because the total amount of resources available is fixed and cannot be
expanded.

2) Based on the results, what do you believe were the union’s three top priorities in
negotiation? Why? (5 marks)
During negotiations, the union's top three demands were probably to create full-
time positions for part-timers, reduce the wage disparity between part-timers and
full-timers, and enhance workplace safety. Union negotiators determined these goals
after researching part-time workers' legal rights and UPS and Teamster Union
contract clauses, revealing the disparity between part-time and full-time workers'
economic conditions.

3) The strike lasted for two weeks. What specific pressures may both the union and UPS
have felt, inside and outside the company as the strike progressed? Why? (5 marks)
As the strike progressed, the union and UPS felt pressure from various sources. The
union felt pressure from their workers, who depended on their jobs and wages and
may have struggled to make ends meet during the strike. The union also felt
pressure from the international labor union organizations supporting their cause.
On the other hand, UPS felt pressure from their customers, impacted by the
disruption in service and the financial losses incurred by the strike. Additionally,
UPS felt pressure from shareholders concerned about the company's economic
performance.
4) The key reasons for the Teamster Union’s success is identified as their preparation in
advance of the negotiation. In your opinion, how does planning help succeed in a
negotiation? What happens if we don’t plan our strategy? Provide one specific example.
(5 marks)

Planning helps succeed in a negotiation because it allows the parties to define their
goals, assess their bargaining position, and develop strategies to achieve their
desired outcome. With planning, the negotiation may become more organized and
efficient, and the parties may miss significant opportunities to advance their
interests. For example, if salespeople fail to plan their sales pitch, they may miss key
points to emphasize and may not effectively persuade the buyer to purchase.